Ann: Estelle Strategic Review Outcomes, page-53

Hi all

Some interesting posts on here and lots of theories again. D
Firstly @dunbraster that was a typo about drilling Stoney this year. It should have said Shoeshine. I didn't pick this up despite reading it so many times so thanks for that, but the company presentation did say Shoeshine..

Here is an email I sent to another shareholder tonight detailing more about the review.

I understand that it is frustrating that the SP has been declining and that the project timelines have pushed out again in this latest announcement. However I am not sure if you have ever built a mine but we have to do all these studies before we permit to ensure we build a mine that is optimal and profitable through various commodity prices. This takes time but it is better to get it right and have a mine that will be operating profitable for years to come as it is a large investment. Yes some companies have rushed their mine builds like Core Lithium for example who rushed their PFS then built their mine, then found out that they got their numbers wrong and look at them now in care and maintenance when the lithium price dropped.

Regarding the huge disconnect between gold stock prices and the record gold price we agree with you and can not understand it either. Below is a tweet I saw today from well known and respected gold investor Rick Rule from Sprott who says the same. I'm not trying to make excuses but when people like Rick who have been investing in gold for decades say this it is obviously a market wide issue and not just related to Nova.

Regarding the drilling we are not saying that we will be drilling constantly for 3+ years. This year the plan is to use 1 or maybe 2 diamond drills and the RC rig (we actually own the RC drill so only labour cost). In the early years we did alot of drilling and defined a very large resource. In those years the emphasis was to grow a big resource as quickly as possible but this meant that most of the resource was in the lowest inferred category. Now as we head to the much higher confidence PFS report the resource we are allowed to use in that report is subject to economic pit constraints and has to be in the higher confidence measured and indicated categories (ore reserves). To get our resources into the higher M&I categories we have to drill at much closer spaces to fill in the "inferred" gaps in the exploration data. So the drilling we are planning for 2024 for the PFS at RPM is not aiming to increase the resource size as such (but it might do), but to focus on increasing more of the current resource into the higher categories for the PFS. Yes we have also said we will do drilling in the general Train area too and at Stibium but that will be using a lower cost RC drill as with the momentum that we have been getting with the US government on the potential critical minerals we need to at least drill test these areas too to see if the amazing surface sample results continue under the surface as well. Remember the critical minerals including antimony are coincident with the gold on our project so we drill for both at the same time. Our hope is that we will get some grant money to fund at least part of this drilling (otherwise we might cut it back abit) but nothing has been confirmed yet and most of the government budgets in the US are not done until late April.

The timeline also pushed out this year as the current studies we are doing on heap leach could be a game changer for the project as heap leach will potentially process millions of tons of low grade ore that was previously going to waste ie: potentially increase gold production. This means less throughput of ore into the plant than in the scoping study which in turn potentially means a smaller plant with less ore sorters needed, lower capex and opex and increasing the gold production as we are now potentially recovering gold from ore that was previously waste (as stated in the announcement). This is the testing we are doing currently and it takes time to work out the optimal process with results expected in late 2024. In addition with the critical minerals we also need to test to determine how we could potentially extract them as well so again more testing and time and hence the timeline pushes out unfortunately, but again best to get the optimal process and do this work before we permit and build the mine. Victoria gold for example at the eagle mine had to shut down production for months after they built their mine as they had issues with fines which were not investigated as part of their PFS. We are learning from these mistakes to ensure we don't make the same ones.

Regarding the sellout yesterday, I looked at my data from CMC Markets (only ASX data not ChiX) and from what I saw IMO possibly 2 people with around 300k shares each sold around 11.30am and with gold stocks currently trading with such low volumes that was enough to push the SP down and the volume for the day was around 1.2m shares. It recovered abit later that day and today's very low volume (15k of shares) too IMO shows that it wasn't the announcement it was just a couple of people saw a volume liquidity event with the announcement and decided for whatever reason to sell into it. I personally am invested in over 20 small cap stocks like Nova and I have been seeing this happen on many of my other small cap stocks for at least the last 12-18 months as well. It's annoying, but there is nothing we can do about it. Yesterday's announcement IMO was very positive for the project and in these announcements we are trying to be as open and transparent with shareholders as we can and even provide some education on heap leach and agglomeration etc as well so shareholders are better informed.

As we stated, the strategic review has given us a clearer and potentially much more profitable path forward now which is currently being tested for the PFS. The PFS is really the 1st serious document which details how the mine will proceed and be built so again we need to take the time to get it right as once the PFS is done permitting commences based on the PFS report. I know some on here said it seems scatter gun but the whole idea of this review was to identify before the PFS the critical path studies that we needed to undertake. The review was never going to give the answers as such as that requires extensive testing and that testing is underway.

Regarding the fast track to production comment I saw a report from a fund manager today (see below) which said in the last few years the time from exploration to production for mines on average was now 16.3 years (USA average 13 years) (up from about 12.7 years ) a few years ago apparently as permitting etc requires alot more data and environmental and other studies now. We are currently at just over 4 years since we started exploring at Estelle and showing production in 2028 would be about 8 years so it is alot quicker than the average. Anyone thinking you can build a mine in just a few years obviously does not understand the whole process or industry as you need numerous years data for just the environmental studies alone before PFS and permitting and we are well advanced with these at Korbel especially and started RPM last year (remember we have only done 2 years of drilling at RPM too so its a pretty new but very important deposit for the project).



Again to reiterate as well. The critical minerals is NOT a diversion from the gold. We drill for gold and the critical minerals (CM) including antimony is coincident in it at Estelle. I don't think that CM's are getting the same headline response here in Australia as in the US. The light bulb has really gone on in the US now that with all their high tech and military requirements needing these CM's but their supply is from Russia and China especially for antimony. The US can't afford not to have these minerals and so they are looking at ways to secure a US domestic supply and companies like Perpetua got some large grants to advance their antimony gold project last year. While we don't have any grants yet confirmed (most US budgets are completed in April), we have engaged some very good consultants who are very well connected in all levels of govt and the DoD and DoE especially, and they have helped us to established some very strong relationships in a very short time with the DoD, DoE and other state and federal US govt depts, and recently as I said on here the State of Alaska has now proposed a bill which will give AIDEA, who are the organisation responsible for the 2nd part of the potential west su road out to our camp, the ability to borrow and fund projects for CMs up to US$300M. In addition, as we said in the announcement we have also partnered with the University of Alaska in their DoE program where they are tasked to determine how to commercialise CM's in Alaska's and they have provided us with support on our findings from our initial surface sampling and there is also the possibility of funding with them as well which we are pursuing. So the CM's are definitely something that is worth pursuing and to really know what we have in this regard at Estelle we need to do some RC drilling this year to support it. I know some on here scoffed at the potential for an early mine at Stibium as well. With a small foot print it could potentially be fast racked through the permitting but again obviously we need at least a few drill holes to confirm if the stibnite vein of 2m x 30m seen on surface continues at depth and if there is more at the prospect. This shouldn't be seen as a diversion from the PFS because if the drilling this year is positive and we start to pursue it it will be largely on the basis of only going ahead if we get some sort of grants to fund it so its an added extra potential bonus if you like, but still only early days.

So which is it for early cashflow? Antimony? RPM starter? Korbel smaller scale sorting, then heap leach later?"
To conclude this long post. The truth at the moment is that we have numerous options and all are being testing and studied for the PFS to determine what is the optimal path to production.

Hopefully this post answered some queries.